Tpi Polene Public Co. Ltd. · SET:TPIPL
Tpi Polene Public — Q3 2022 Earnings Presentation
39 slides from Tpi Polene Public's earnings presentation, Nov 25, 2022
Slide 1: Opportunity Day Presentation – Third Quarter Performance
Opportunity Day Presentation – Third Quarter Performance 25 November 2022 SET Opportunity Day Presentation1
Slide 2: Topics
Topics Business Overview Financial Performance & Position Outlook Sustainability and Other Matters Spotlight On The Specialty Polymer Segment SET Opportunity Day Presentation 2
Slide 3: The Corporate Structure
The Corporate Structure TPI Polene Public Company Limited Specialty Polymers &Chemicals Construction (47%, 23%) (35%, 49%) Agriculture & Others (<1%) Energy/Utilities (17%, 28%) 70.24% TPI Concrete Co., Ltd. 99.99% TPI All Season Co., Ltd. 99.99% Thai Propoxide Co., Ltd. TPI Polene Power Plc. 99.99%
Slide 4: Key Assets and Features
Key Assets and Features Construction Materials Specialty Polymers/Chemical Segment Energy & Utilities • Specialty Polymers – 158k tons capacity • Cement - 4 lines totaling 13.5 MT capacity − HVA, customized with in-house proven R&D • Total current capacity 440 MW as below comprising >65% Green power
Slide 5: Our Products – over 5,000 SKUs
Our Products – over 5,000 SKUs SET Opportunity Day Presentation 5
Slide 6: Highlights in 3Q22
Highlights in 3Q22 • The positive momentum seen in 2Q22 mostly continued into the 3Q22 • The weak seasonality that we tend to see from 2Q to the monsoon season in 3Q was not very evident in sales value due to programmed price adjustments • Of the many product groups Mortar, Nitrate and Concrete post
Slide 7: Highlights in 3Q22
Highlights in 3Q22 Performance snapshot THB m 3Q22 3Q21 % YoY 2Q22 % QoQ 9M22 % YoY Sales 12,523 9,013 39% 12,476 0.4% 37,434 32% COGS (9,095) (6,260) 45% (8,904) 2% (27,032) 41% Gross profit 3,428 2,753 25% 3,572 -4% 10,401 14% SG&A (1,392) (1,162) 20% (1,450) -4% (4,356) 11% Finance costs (480) (4
Slide 8: Financial Performance & Position
Financial Performance & Position SET Opportunity Day Presentation 8
Slide 9: Segment performance
Segment performance 3Q22 breakdown and margins YoY Growth YoY Growth Segment EBITDA margin 61% 11% ConsMat 10% 56% 91% Specialty Polymers/Chemicals 46% -16% -33% Energy & Utilities 42% -12% -90% Agri & Others 6% 39% 22% Overall 29% 9M22 breakdown Segment Breakdown Sales YoY Growth EBITDA YoY Growth
Slide 10: EBITDA margin mostly improving
EBITDA margin mostly improving SET Opportunity Day Presentation 10
Slide 11: Peer comparison – how the EBITDA performance stacks up?
Peer comparison – how the EBITDA performance stacks up? Peer comparison EBITDA margins 1Q22 2Q22 1H avg 3Q22 9M avg Remarks ConsMat No 1 12.0% 9.8% 10.9% 7.7% 9.8% Has significant operations overseas No 2 22.0% 25.0% 24.0% 16.0% 21.0% Has significant operations overseas TPI Polene 13.0% 19.3% 16.1%
Slide 12: Financial Position – falling leverage ratio; defensive cash positioning
Financial Position – falling leverage ratio; defensive cash positioning * Based on 1) Accounts & other receivables 2) Inventories 3) Accounts & other payables 12
Slide 13: Outlook
Outlook Key Drivers: Increased real estate development activities especially on the back of improving tourism Infrastructure spending to improve slightly on election spending Continued product price adjustments on higher energy cost; another round of Ft adjustment to hit electricity costs Higher dem
Slide 14: Demand outlook positive
Demand outlook positive Overall ConsMat price index plateauing in monsoon season but still high Cement price index show higher cement prices CCI – Buying a house is improving Major listed property developers achieving high presales 14 Source: MOC, UTCC, MST research SET Opportunity Day Presentation
Slide 15: Global cement demand rising; export market healthy
Global cement demand rising; export market healthy Global demand CAGR of 5.1% during 2022-2027 Production indicates low capacity addition; environmental cost is a factor Top Ten Global Exporters of Cement Thailand has the capacity to export – TPIPL is among the top SET Opportunity Day Presentation 1
Slide 16: ConsMat Prices likely to remain high – cost push inflation
ConsMat Prices likely to remain high – cost push inflation Higher energy prices is likely to be a medium term trend; Ft adjustments may revisit the 2008-2015 positive cycle Unit : Stang/kWh Year Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2022 1.39 1.39 1.39 1.39 24.77 24.77 24.77 24.77 93.43
Slide 17: Sustainability and Other Matters
Sustainability and Other Matters 17
Slide 18: Our Bio-Circular-Green (BCG) Economy Proposition
Our Bio-Circular-Green (BCG) Economy Proposition Capex 2021-2026 Investment EBITDA pa ROCE Payback Projects in the implementation pipeline Internal projections THB m THB m % Years EVA powder and new HVA product Specialty Polymer Power plant modification from coal to MSW - Efficiency & expansion 1,08
Slide 19: Achievements in 9M22
Achievements in 9M22 TPIPP progress : 1) used 2.1m tons of MSW, +40% YoY reducing GHG emissions by an equivalent of 4.88m tons CO2 based on MSW dumped into the landfill that emits 3.49m tons of CO2 equivalent per ton of landfill waste 2) reduced water consumption by 11% YoY (or 840k m3 ) and was abl
Slide 20: Litigation Cases
Litigation Cases The Court ordered the Company by Case Charge/ Environmental Acts B.E. 2535 to either Case Plaintiff status Date Offense Refill Rocks Pay (Mil. Tons) OR (Mil. Baht) Sor Vor 4/2559 8/7/2015 Department of 31.52 4,047 Pending the Supreme Court Consideration Primary Industry The violatio
Slide 21: Litigation Cases (cont’d)
Litigation Cases (cont’d) Court ordered Charge/ Case Date Plaintiff Value (Mil. status Offense Baht) 2/6/2017 Tham Phra The court called the Company to Depend on the value The Central Administrative Court Phothisat be an interpleader for the claim of rock used dismissed the lawsuit Temple that the D
Slide 22: Spotlight On The Specialty Polymer Segment
Spotlight On The Specialty Polymer Segment 22
Slide 23: TPI Polene – Specialty Polymer Business
TPI Polene – Specialty Polymer Business TPIPL Specialty Polymer Recapitulation EVA Market Highlights & Outlook TPIPL Strategic Updates 23
Slide 24: TPI Polene – Specialty Polymer Business
TPI Polene – Specialty Polymer Business TPIPL Specialty Polymer Recapitulation EVA Market Highlights & Outlook TPIPL Strategic Updates 24
Slide 25: TPI Polene – Specialty Polymer Recapitulation
TPI Polene – Specialty Polymer Recapitulation Products and Applications : LDPE Film / Coating & Lamination / Injection EVA Foam / Shoes / Lamination / Wire & Cable / Hot-melt Adhesive / PV Encapsulant / Binder PV Encapsulant Solar panel production VAE Emulsion Adhesive application Rayong VAE Powde
Slide 26: Ethylene Industry Chain & EVA Applications
TPI Polene – Specialty Polymer Recapitulation Ethylene Industry Chain & EVA Applications Polymer Products Foaming PE 120 Lamination MTPY 210 MTPY Wire & Cable Ethylene Hotmelt Adhesive PV Film EVA 4-5 Binder & Others MTPY Source: SCI (2021) 26
Slide 27: TPI Polene – Specialty Polymer Business
TPI Polene – Specialty Polymer Business TPIPL Specialty Polymer Recapitulation EVA Market Highlights & Outlook TPIPL Strategic Updates 27
Slide 28: EVA Demand and Growth by Applications
EVA Market Highlights and Outlooks EVA Demand and Growth by Applications EVA – Niche Better Product Spread EVA – Adhesive & Cable EVA – PV Film EVA – Foam & coating Foam Cable & PV Others LDPE Adhesive Film *China and NE.Asia data More Difficult / Rate Reduce Source: SCI International Busines Unit (
Slide 29: EVA Market Highlights and Outlooks
EVA Market Highlights and Outlooks Global solar photovoltaic (PV) market expected to increase ~5x by 2028 The strong rising demand of Solar energy with a CAGR 26% underpins the resiliency of our Specialty Polymers Fossil fuel crisis caused by Ukraine war is a Game Changer for Renewables – Solar etc.
Slide 30: EVA Supply & Global Producers
EVA Market Highlights and Outlooks EVA Supply & Global Producers Biggest plant size = 300 KTPY smaller plants ~ 40-50 KTPY Mostly in NE. Asia Cheap Raw Materia TPIPL Size = 79 KTPY x 2 Source: ICIS Petrochemical Newly added EVA/LDPE capacity ~ 1.5-1.7 MTPY in 2021-2022 30
Slide 31: Ethylene & its Downstream Price (Asia) & Events
EVA Market Highlights and Outlooks Ethylene & its Downstream Price (Asia) & Events COVID-19 lockdown threat; traders and producers lower inventory 1.2 MTPY New EVA capacity in N.E. Asia 0.5 MTPY New EVA capacity Sep - Dec’22 No new capacity until - 2024 : 0.2 MTPY - 2025 : 0.4 MTPY in N.E.Asia But t
Slide 32: EVA vs PE – Product Spread & Outlooks
EVA Market Highlights and Outlooks EVA vs PE – Product Spread & Outlooks � End of the year de-stocking activities from producers and traders � Slowdown in PV industry in 4Q22 due to high silicon price � New EVA capacity in early 1Q23 ▲ Continuously high energy price and demands in renewable energy b
Slide 33: TPI Polene – Specialty Polymer Business
TPI Polene – Specialty Polymer Business TPIPL Specialty Polymer Recapitulation EVA Market Highlights & Outlook TPIPL Strategic Updates 33
Slide 34: Increase High Value-Added EVA Sales
TPI Polene Strategic Updates Increase High Value-Added EVA Sales EVA – Niche TPIPL focus on HVA EVA product applications Better Product Spread which provide higher spread. In 3Q2022, 87% of EVA – Adhesive & Cable sales were HVA products. EVA – PV Film EVA – Foam & coating LDPE More Difficult / Rate
Slide 35: Expand High Value-Added EVA Portfolio
TPI Polene Strategic Updates Expand High Value-Added EVA Portfolio EVA – Niche TPIPL will expand EVA portfolio to include most Better Product Spread of HVA EVA applications. Currently, 6 new grades are EVA – Adhesive & Cable in the pipe-line, including a new ZV1055 high MFI adhesive grade commercial
Slide 36: Increase High Value-Added EVA Production Rate
TPI Polene Strategic Updates Increase High Value-Added EVA Production Rate Although, HVA EVA grades has better price premium over foaming grades, most plants suffer rate reduction trade-off. TPI has successfully recovered those penalties and will further improve to surpass the original capacity. We
Slide 37: Add Synergetic VAE Products
TPI Polene Strategic Updates Add Synergetic VAE Products Corrugated Label Furniture Paper Core Parquet Synergy of having EVA Resin, Paper VAE Emulsion, 18,000 TPY and VAE Powder: - Share infrastructure, raw materials - Utilized waste steam and waste Ethylene purge gas from EVA high pressure process
Slide 38: R&D on New Ethylene Copolymer Products
TPI Polene Strategic Updates R&D on New Ethylene Copolymer Products VHP Pilot Reactor New Co-polymer TPI has successfully Better Product Spread installed a pilot reactor for ”very high-pressure” EVA – Niche pilot reactor and been experimenting with new co- polymer products. We are the only Asian pro
Slide 39: End of Presentation Q&A Thank You
End of Presentation Q&A Thank You 39
TPI Polene Public Company — Q3 2022 Earnings Presentation on 6ix